Pension cap survives Ill. House test vote

By JOHN O’CONNOR and SARA BURNETT - The Associated Press

March 8, 2013

SPRINGFIELD – A day after Gov. Pat Quinn upbraided lawmakers for inaction on the state’s multibillion-dollar pension mess, House members found a proposal they could get behind, backing a measure to limit the salary on which a public employee’s retirement benefits could be based.

The measure – part of a leading proposal to bail Illinois out of its $96.7 billion pension crisis – was presented as a test vote Thursday as lawmakers continue to feel their way toward a universally agreeable solution.

Two Republicans joined Democrats in the 65-7 vote in favor of the amendment, which would cap the salary that pension benefits are based on at the limit set for Social Security, currently $113,000 a year. Supporters say it could save Illinois $1 billion a year.

Another 43 Republicans didn’t vote, in protest of the process.

Quinn on Wednesday blamed legislators’ inaction on the pension problem for what he called “the most difficult budget Illinois has ever faced.” His $62.4 billion spending blueprint cuts $400 million from public education and proposes changing state law to slice $241 million from what otherwise are statutorily required payments to programs, services and research.

Also Thursday, lawmakers sent Quinn a measure to get the state out of a financial mire in the bureau that licenses physicians but stalled a vote on a new plan to expand legalized gambling, this time to pump more money into schools.

The pension cap, part of a larger measure sponsored by Rep. Elaine Nekritz, a Northbrook Democrat, and House Republican Leader Tom Cross of Oswego, would apply only to current employees who have not yet reached that salary level. Anyone already earning $113,000 or more per year would still be eligible to receive a pension based on the higher salary.

A House committee is likely to consider the full bill next week, said Cross spokeswoman Sara Wojcicki Jimenez.

The Senate also plans a return to the issue. Senate President John Cullerton, a Chicago Democrat, has said there will be committee actions on his pension plan next week. That bill combines Cross and Nekritz’ legislation with a measure he has pushed as a constitutional option because it would offer annuitants a choice of post-career benefits.

Thursday’s House vote was part of a process Democratic Speaker Michael Madigan is using to gauge where legislators stand on possible reforms. It’s the first amendment of seven over two days of debate — including one day last week — to get enough votes to pass.

House members rejected two other amendments Thursday — one freezing cost-of-living increases for 10 years and one requiring employees to contribute 4 percent more to their retirement packages.

There will be plenty more debate. Quinn made the pension debacle the centerpiece of his budget address Wednesday. He also proposed ending three corporate tax breaks he said could provide $454 million a year toward a $9 billion backlog of bills due to vendors. Quinn’s administration says his budget proposal cuts services and programs to reduce that backlog by $2 billion in the coming year.

Quinn also wants to cut $241 million from 66 accounts set in state statute that automatically provide annual funding to public transit systems, conservation programs, cancer and other medical research and more. State law provides for increases each year in those funds — the total for the budget year that begins in July is estimated to be $2.72 billion, but Quinn’s plan would keep it at last year’s $2.47 billion level.

The governor also signaled in his budget speech that he is open to expanded gambling, even though he has vetoed two plans for five new casinos in less than a year. The governor said those proposals did not provide enough state oversight, allowed continued political contributions from the gambling industry and left open “loopholes for mobsters.” But if those questions are addressed and the money goes for schools — which the budget proposal targets with $400 million in cuts — Quinn said he is willing to listen.

Hours after the speech Wednesday, the Senate Executive Committee endorsed such legislation and supporters predicted a floor vote Thursday. But after a closed-door meeting early Thursday afternoon, majority Democrats called off a roll call. Spokeswoman Rikeesha Phelon said only that “the sponsor will keep meeting” with fellow senators, supporters and detractors to ensure a successful tally.

One victim of the state’s financial mess appeared headed for a solution Thursday when the House approved an increase in physicians’ license fees to bail out the medical unit of the Department of Financial and Professional Regulation. The measure, which passed 65-49, would increase a three-year license to $700, up from $300.

The increase would repay a $6.6 million loan used to rehire staff members laid off in January from the agency’s medical unit which licenses doctors and investigates wrongdoing.

Quinn supports the plan, which “will help ensure that Illinois can continue to attract the best physicians in the world,” Manuel Flores, acting secretary of Financial and Professional Regulation, said in a statement.

The Illinois State Medical Society opposed the steep fee increase, saying past diversions of money from the Medical Disciplinary Fund caused the problems.

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The pension bill is HB1154. The gambling bill is SB1739. The medical bill is SB622.